Municipal Budget for Fiscal Year Ending June 30, 2014

I am taking this opportunity to update you on the status of the annual budget process. My purpose here is not to advocate on behalf of it (though I think it a reasonable proposal) but to provide factual and honest information in hopes of encouraging you to seek out additional information, answer any questions you may have and promote an open and honest dialogue of its merits.      

At this point in the process the Board of Finance has made a preliminary recommendation which I have summarized below (figures are rounded to thousands):

12-13 Bud

13-14 BOF 

Variance

% Chg.

Municipal Operations

 Wages

 Taxes & Benefits

 Operating Exp.

  Security

Total Munic. Ops.

To those of you who received (and read) my previous notes on the budget this may be bit repetitious.  That is because this recommendation maintains the Selectmen’s unanimous recommendation with minor adjustments and the addition of a second School Resource Officer to the Police Department budget.  Because this is a totally new item to the budget I have shown it separately to highlight the overall impact on spending.   Aside from the SRO’s there is little new in the budget vs. the current 2013 budget.  The focus is on three major areas:

1. Maintaining services at current levels.
2. Continuing our commitments to maintain Town facilities and address long term needs.
3. School security.

The Town has several challenges that need to be addressed and as a result tough choices were made and some items have been put off.  As noted the budget is focused on preserving key services and investments.  

As you can see the proposal increases Municipal Operations by just over $1.1 million or 7.9% and Education by $1.4 million (3.7%) with total spending going up by $2.65 million a growth of 4.7%.  

Excluding a few extraordinary items the base costs of Municipal Operations is increasing by less than $200,000 or about 1.2%.  The rest of the 7.9% increase, or $960,000 is contained in a few specific items. 

What is driving the increases on the Municipal Operations?

1. Pension costs – We have added $253,000 to the benefits line as part of our catch-up to fully fund the required contribution.  This is an important commitment.  Pension funding levels are a key metric used by the investment community to gauge our financial management and can affect our borrowing costs.  This increase alone is a 1.8% increase in municipal spending.
   
   
2. Health Insurance – This line is increased by $173,000.  While we have made progress in shifting municipal health plans to ones more consistent with private sector plans (from first dollar coverage to high deductable plans with employees picking up a larger share of the costs) current quotes indicate a 9% increase in costs of insurance.  This represents a 1.2% increase in municipal spending.
   
   
3. Sand & Salt – We are adding $98,000 to this line.  Used for road safety during snow storms, last year, after a warm winter, this line was reduced to reflect the savings.  This line item is expected to be short about $50,000 this year.  The recommendation is to return the budget for this item to an average of the past several years.  This represents 0.7% of the 7% increase.
   
   Note, the above 3 items account for almost ½ of the 7.9% increase.
   
   
4. 2 New positions – The proposal includes a new position in the Highway department and a new position for on-site technology / hardware support.  In total these add approximately $106,000 (salary, taxes and benefits) or 0.7% of the municipal increase.
   
   Highway – Over the past few years we have made a significant investment in our roads.  As part of the maintenance of that investment the budget includes funding for adding a person to the Highway department.  The Town has approximately 2,000 catch basins on the side of our roads.  These need to be cleaned each year or they back up and undermine the stability of the pavement.  This is a task that has been long delayed due to a long term reduction in staffing in this department.   While the department requested 2 positions to address this need, the budget proposes starting to address this with 1 position and some seasonal or part time help.  This as a critical need to preserve the value of the investment we have made.
   
   Technology Department – Currently the Town employs a single IT manager.  The responsibilities include implementation of systems as well as purchasing and maintaining all the various computers and printers by Town Departments.  While we do currently use some outside consulting services, it is prudent for coverage and continuity to provide an additional person to help maintain our technology investment, increase training and other support services to our employees.
   
   
5. Security – As previously noted the proposal contains $230,000 in the Police Department for additional School Security.  This is for two School Resource Officers (SRO).  We don’t need to dwell on the reasons this issue has become a major concern for all communities, particularly in our area.  This represents 1.6% of the municipal increase in spending.  In addition, the Capital budget includes additional funding for the building security upgrades.

As noted the 5 items listed above account for $962,000 or 6.7% of the 7.9% increase in Municipal Operating costs.  Other increased costs accounting for the other 1.2% increase cover such items as Building and Equipment Maintenance ($63,000), Volunteer fire Departments and Emergency Medical Services ($41,000),  Legal Notices, Hardware and Software maintenance and other insurance costs ($41,000).  These are somewhat offset by some anticipated savings in Fuel Costs of about $23,000. 

What drives increase in Capital?We look at the Capital line in the budget as the funding we put in the budget for the maintenance and replacement of existing physical assets, the acquisition of new assets not funded through long term debt and funding of reserve accounts for long term or deferred projects (i.e. revaluation, road maintenance, vehicles).   The current annual need for this maintenance is estimated to be somewhere between $3 million and $3.5 million.  For too long the Town has avoided fully funding maintenance.  The intention is to keep increasing this account until we get to a point where we can maintain our facilities on a consistent base without resorting to higher cost debt financing. 

Education:The Board of Education has some of the same challenges as noted for the town above, specifically pension and health care cost increases.  They have presented a budget request of $38,746,000, a 4.6% over its current budget.   There are various initiatives in the request, primarily adding to the World Language program and providing additional support to students in need.  The Board of Finance does not have line item responsibility for the Education budget.  It can only recommend a total spending plan.  The Board of Education has indicated that the increase of 3.7% will not allow them to expand services other than where legally required to do so.  The Board of Education will make its final determinations after the budget is passed 

A Final Observation:In reviewing the budget we should not lose sight of the underlying realities.  A budget is not about numbers.  An honest budget (and I think this is an honest budget) reflects accurately the financial resources required to deliver a specific quantity and quality of services.  Reasonable people may differ on what services they think appropriate or what quality they may want.  This is a reflection of our differing values.  While we all want to pay less for more, recognizing that opportunities for efficiencies are already reflected in the plan, reasonable people will understand that a desire for a reduction in cost should be accompanied by a willingness to accept less in services.  A dialogue about what services we want and or need; the quality or quantity of those services and how they impact the quality of life in Brookfield can certainly be a constructive conversation.   

This is necessarily a summary of the issues and challenges in this budget.  There are undoubtedly unanswered questions.  I welcome feedback and questions. 

Next steps in the budget process: The Board of Finance will be holding a public hearing on the budget Tuesday April 9^th.  I urge you to attend, ask questions, get informed, and give feedback.  This is the best way to insure a budget that meets the needs of our community. The Board of Finance has scheduled a meeting on Tuesday the 16^th for their final deliberations.